The international fragmentation of goods production is driven by improvements in information communication and transport services Accounting Software development Product design HR and payroll management se雪 And is creating opportunities for international specialization not just in goods parts but also services tasks
The international fragmentation of goods production is driven by improvements in information, communication and transport services And is creating opportunities for international specialization not just in goods parts but also services tasks HR and payroll management Accounting Software development Product design
In parallel, the international fragmentation of services production Call Centre for customer service, etc Medical transcription services Outsourced consultations Web hosting and d diagnostics webmaster services is also creating new opportunities for specialization and trade
In parallel, the international fragmentation of services production Call Centre for customer service, etc. Medical transcription services Web hosting and webmaster services Outsourced consultations and diagnostics is also creating new opportunities for specialization and trade
While production is fragmented firms are increasing selling bundles of goods and services Firm-specific economies of scope in production and positive externalities in consumption There's iPhone And then theres everything else Servicecenter After sale service with 24/7 roadside assistance. Nowan A no cost scheduled maintenance that's caring for you and your car. oyota Care
While production is fragmented, firms are increasing selling bundles of goods and services • Firm-specific economies of scope in production and positive externalities in consumption
Growing evidence of manufacturers selling services The ratio of services revenue to total revenue in uK manufacturing sector increased from 5% in 1997 to slightly over 20% in 2007(Breinlich et al. 2014) Manufacturing s sales of services in Sweden have increased from 13.6% to 20.3%of total sales over the 1997-2006 period National Board of Trade (2010), Lodefalk(2013, 2015) Rolls-Royce generated nearly half its revenue from services in the period 2006-2009 Ericson about one-third and arcelor Mittal one fifth Service intensity was small on average in formal manufacturing in India, but varied significantly across sectors(Grover and Mattoo, work in progress)
Growing evidence of manufacturers selling services • The ratio of services revenue to total revenue in UK manufacturing sector increased from 5% in 1997 to slightly over 20% in 2007 (Breinlich et al., 2014). • Manufacturing’s sales of services in Sweden have increased from 13.6% to 20.3% of total sales over the 1997-2006 period (National Board of Trade (2010), Lodefalk (2013, 2015) • Rolls-Royce generated nearly half its revenue from services in the period 2006-2009, Ericson about one-third and Arcelor Mittal one fifth. • Service intensity was small on average in formal manufacturing in India, but varied significantly across sectors (Grover and Mattoo, work in progress)
Measuring the contribution of services to exports Services value added embodied in gross exports of country c as a percentage of gross exports SERV-.i EXGR C,p,t EXGRC p i ∈S p小(p,cj where p, s a vector of the value added share of service industry j in partner country p B is the global Leontief inverse of the inter-country input-output matrix [B=(-A)with (Bp,cji the ji-th element of B, EXGRC,p, i is a vector of gross exports from country c to country p for any given industry Xp EXGrc,p, i are total exports for country c and industry This section draws on Sebastian Miroudot, "Services in Global Value Chains: From Inputs to value Creating Activities
Measuring the contribution of services to exports Services value added embodied in gross exports of country c as a percentage of gross exports 𝑆𝐸𝑅𝑉_𝑉𝐴𝐺𝑅𝑐,𝑝,𝑖 = 𝑗∈𝑆 𝑉𝑝,𝑗 𝐵𝑝,𝑐 𝑗𝑖 𝐸𝑋𝐺𝑅𝑐,𝑝,𝑖ൗ𝑝 𝐸𝑋𝐺𝑅𝑐,𝑝,𝑖 • where 𝑉𝑝,𝑗 is a vector of the value added share of service industry j in partner country p • B is the global Leontief inverse of the inter-country input-output matrix [𝐵 = (𝐼 − 𝐴) −1 with (𝐵𝑝,𝑐 )𝑗𝑖 the ji-th element of 𝐵𝑝,𝑐 ] • 𝐸𝑋𝐺𝑅𝑐,𝑝,𝑖 is a vector of gross exports from country c to country p for any given industry I • σ𝑝 𝐸𝑋𝐺𝑅𝑐,𝑝,𝑖 are total exportsfor country c and industry i. This section draws on Sebastian Miroudot, “Services in Global Value Chains: From Inputs to Value Creating Activities